The Rational Optimist by Matt Ridley
Rating: 7/10
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One Sentence Wrap-Up
We are living like kings in comparison to our ancestors, due to our acceleration towards being ever more diverse as consumers and specialised as producers, leading to saved time and increased wealth.
Summary Notes
Another recommendation by Naval. This book highlights that we have found a way to drive for the continuous betterment of humankind: by working together to accumulate our knowledge and continue to head towards the trajectory of diverse consumption and specialised production. Essentially prosperity comes from everybody working for everybody else. The mutual dependence, trust, and sharing that result are causes for hope.
With the constant stream of negativity from the news, it is good to be reminded that we, as a specie, are not doing so bad after all.
Personally, this book challenges me to re-evaluate the way I see the world. Is biofuel as environmental friendly as advertised? Is it ethical to refrain the developing world from using non-renewable resources to solve the global warming problem? Is capitalism the root of all evils? It does not give a definitive answer to any of those questions but leave me wondering whether what we have been told by society, or the media, are the only version of the truth. Therefore, we should keep an inquisitive mind and do our own research before coming to a conclusion on any topic.
Although insightful, it did get a little long winded and at times, I feel as though it is rehashing ideas that I was exposed to elsewhere. I was reading "Beyond Order - 12 More Rules for Life" in parallel and I could see a thematic theme between the two (i.e. key lesson 2 below) even though they are approaching it from different angles.
I would recommend the book to all who is looking for a positive reminder that we are doing well as a specie, and is willing to be challenged in their worldview, particularly on the topic of global warming.
Key Lesson Learnt #1 - Increasing self-sufficiency is the definition of a failing standard of living
To achieve our current lifestyle, we, as human beings, are heavily reliant on others or things that are out of our control. For example, only a few of us understand the mechanism behind how lights are turned on, or how clean water runs out of a tap, or how warmth is generated from central heating. Imagine the effort required for us to take care of ourselves without such conveniences. We would spread our time so thin across different areas just to stay alive. We would be working all day, everyday, thus no time for anything else.
Increasing self-sufficiency is the very signature of a civilisation under stress, the definition of a falling standard of living.
Thankfully, we are not striving to be self-sufficient. Our society promotes exchange. Through exchange, we discovered the division of labour and the specialisation of efforts and talents for mutual gain. As a result, we only need to become specialised producers and diversified consumers for the good of our society.
Specialisation spurs innovation, because it encourages the investment of time in a tool-making tool. That saved time, and prosperity is simply time saved, which is proportional to the division of labour.
Prosperity is time saved. The cumulative accretion of knowledge by specialists that allow us each to consume more and more different things by each producing fewer and fewer is, I submit, the central story of humanity.
With time saved, we can devote more of it to doing something else. We are liberated to make or buy another product or service, or do a charitable act, which can mean employment for somebody else: this is what economic growth means.
This is the diagnostic feature of modern life, the very definition of a high standard of living: diverse consumption, simplified production. Make one thing, use lots.
This is history's greatest theme: the metastasis of exchange, specialisation and the invention it has called forth, the 'creation' of time.
Even though history has been blatantly obvious, that exchange causes mutual prosperity while self-sufficiency causes poverty, we still have countries around the world closing off their borders and flirting with protectionism. They all suffer as a result. Examples include North Korea under Kim II Sung, Albania under Enver Hoxha, China under Mao Zedong and Cuba under Fidel Castro.
Key Lesson #2 - Challenge what you know. Beware of blanket univariate (single variable) causes for diverse, complex problems.
This book made me question whether concepts that I believe to be true are indeed true. The author challenges the popular ideologies that exist today:
- Climate changes would devastate the planet, thus the need to shift towards sustainable fuels such as biofuel, solar energy, wind energy, etc.
- Capitalism is to be blamed for our fragmented society, dominance and oppression
On the first point, he presents evidence to prove that with our current technological capability, we are unable to depend on renewable alternatives for all of our energy consumption without compromising the environment significantly. The renewable alternatives are "land-devouring monsters", can we really brand them as 'green', virtuous or clean? Is this really the case when we are using the landscape surrounding us to make power?
To get an idea of just how landscape-eating the renewable alternatives are, consider that to supply just the current 300 million inhabitants of the United States with their current power demand of roughly 10,000 watts each (2,400 calories per second) would require: solar panels the size of Spain; or wind farms the size of Kazakhstan; or woodland the size of India and Pakistan; or hayfields for horses the size of Russia and Canada combined; or hydroelectric dams with catchments one-third larger than all the continents put together.
As it is, only a clutch of coal and nuclear power stations and a handover of all oil refineries and gas pipelines supply the 300 million Americans with nearly all their energy from an almost laughable small footprint.
The author argues that despite non-renewable energy being the cause of global warming, the warmest version of the future will have the least hunger, and will have ploughed the least extra land to feed itself. He attempts to dismantle some of the biggest cases against global warming with data points:
- Sea level - The IPCC forecasts that average sea level will rise by about 2 - 6mm a year, compared with a recent rate of about 3.2mm a year. At such rate, although coastal flooding will increase slightly in some place, some countries will continue to gain more land from siltation than they lose to erosion
- Melting ice caps - The highest estimates of Greenland's melting are that it is currently losing mass at the rate of less than 1% per century. There is a temperature at which the Greenland and west Antarctic ice caps would disintegrate, but according to the IPCC scenarios if it is reach at all it is certainly not going to be reached in the 21st century
- Health - Globally the number of excess deaths during cold weather continues to exceed the number of excess death during heat waves by a large margin - by about five to one in most of Europe. Besides, people will adapt, considering that they move happily from London to Hong Kong or Boston to Miami and do not die from heat, so why should they die if their home city gradually warms by a few degrees?
- Food supply - The global food supply will probably increase if temperature rises by 3 degrees celsius. Not only will the warmth improve yields from cold lands and the rainfall improve yields from some dry lands, but the increased carbon dioxide will itself enhance yields, especially in dry areas. Wheat, for example, grows 15 - 40% faster in 600 parts per million of carbon dioxide than it does in 295 ppm. (Greenhouses often use air enriched in carbon dioxide to 1000 ppm to enhance plant growth rates.)... Indeed under the warmest scenario, much land could revert to wilderness, leaving only 5% of the world under the plough in 2100, compared with 11.6% today, allowing more space for wilderness
He is not advocating for us to turn a blind eye on global warming. He is asking us to consider prioritising our effort in combating the most pressing issues first: hunger, dirty water indoor smoke and malaria. They cause the highest number of premature and unavoidable death in poor countries, killing respectively about 7, 3, and 2 people per minute. Can we justify our lavish spending on exceptionally expensive new sources of energy now?
The questioning becomes deeper when we consider the reality of our usage of fossil fuel. If it were not for fossil fuels, 99% of people would have to live in slavery for the rest to have a decent standard of living, as indeed they did in Bronze Age empires.
Since a reasonable fit person on an exercise bicycle can generate about 50 watts, this means that it would take 150 slaves, working 8-hour shifts each, to peddle you to your current lifestyle. Next time you lament human dependence on fossil fuels, pause to imagine that for every family of four you see in the street, there should be 600 unpaid slaves back home, living in abject poverty: if they had any better lifestyle they would need their own slaves.
In the developed world, we are looking to limit our use of fossil fuel in a way that would not compromise our standards of living. In the developing world, they are playing catch-up to achieve better standards of living. Can we deny the developing world their rights to growth via fossil fuel, or to the same lifestyle as the developed world?
Let's not forget that there will be technological changes, with innovation and discovery expanding the realm of what is possible. Tomorrow, we may discover carbon-free energy sources that do not have the disadvantages as discussed: devices in space to harness the solar wind, or the rotational energy of the earth. Ingenuity is rampant as never before in this massively networked world and the rate of innovation is accelerating.
Solving the global warming problem now implies that your impoverished great great great grandfather, whose standard of living was roughly that of a modern Zambian, should have put aside most of his income to pay your bills today. With a higher discount rate. Even in the worst case, harm done by climate change in the twenty-second century is far less costly than harm done by climate-mitigation measures today.
In short, is it moral to ask the present generation, particular the present generation in the developing world, to tackle the global warming problem?
As Isaiah Berlin put it, 'disregard for the preferences and interests of individuals alive today in order to pursue some distant social goal that their rulers have claimed is their duty to promote has been a common cause of misery for people throughout the ages.'
On the second point, most people saw capitalism as necessary evils, rather than inherent goods. It is almost an axiom of modern debate that free exchange encourages and demands selfishness, whereas people were kinder and gentler before their lives were commercialised, that putting a price on everything has fragmented society and cheapened souls.
However, there is a direct link between commerce and virtue. Based on research by John Padgett at the University of Chicago, it was found that far from self-interest increasing, it withered, as a system of 'reciprocal credit' emerged in which business partners gradually extended more and more trust and support to each other. There was a 'trust explosion', 'Wherever the ways of man are gentle, there is commerce, and wherever there is commerce, the ways of men are gentle,' observed Charles, Baron de Montesquieu.
Far from being a vice,' says Eamonn Butler, 'the market system makes self interest into something thoroughly virtuous.' This is the extraordinary feature of markets: just as they can turn many individually irrational individuals into a collectively rational outcome, so they can turn many individually selfish motives into a collectively kind result.
In addition, we are living in unprecedented safety compared to our ancestors. The rapid commercialisation of lives since 1800 has coincided with an extraordinary improvement in human sensibility compared with previous centuries. Random violence makes the news precisely because it is so rare; routine kindness does not make the news precisely because it is so commonplace. Charitable giving has been growing faster than the economy as a whole in recent decades. The internet reverberates with people sharing tips for free.
The lesson of the last two centuries is that liberty and welfare march hand in hand with prosperity and trade.
Key Lesson #3 - Knowledge is limitless: we cannot exhaust the supply of ideas, discoveries and inventions. Dare to be an optimist
Human history is a tale of progressively discovering and diverting sources of energy to support human lifestyle. We can use up our sources of energy, but we cannot exhaust the supply of ideas, discoveries and inventions, as long as we continue to promote a society that values exchange and specialisation. The accelerated growth of our collective knowledge leads to further reduction in time saved, thus prosperity.
This is the story of the twentieth century, which gave everybody access to the privileges of the rich, both by making people richer and by making services cheaper.
Today it will have cost you less than half a second of your working time if you are on the average wage: half a second of work for an hour of light. In 1950, with a conventional filament lamp and the then wage, you would have had to work for 8 seconds to get the same amount of light. Had you been using a kerosene lamp in the 1880s, you would have had to work for about 15 minutes to get the same amount of light. A tallow candle in the 1800s: over 6 hours' work. And to get that much light from a sesame oil lamp in Babylon in 1750 bc would have cost you more than 50 hours' of work. From 6 hours to half a second - a 43,200-fold improvement - for an hour of lighting: that is how much better off you are than your ancestor was in 1800, using the currency that counts, your time.
The human race will continue to expand and enrich its culture, despite setbacks and despite individual people having much the same evolved, unchanging nature. The 21st century will be a magnificent time to be alive.
Dare to be an optimist.
Favourite Quotes
At some point in human history, ideas began to meet and mate, to have sex with each other.
So this is what poverty means. You are poor to the extent that you cannot afford to sell your time for sufficient price to buy the services you need, and rich to the extent that you can afford to buy not just the services you need but also those you crave.
This is what it would take to feed nine billion people in 2050: at least a doubling of agricultural production driven by a huge increase in fertiliser use in Africa, the adoption of drip irrigation in Asia and America, the spread of double cropping to many tropical countries, the use of GM crops all across the world to improve yields and reduce pollution, a further shift from feeding cattle with grain to feeding them with soybeans, a continuous relative expansion of fish, chicken and pig farming at the expense of beef and sheep (chickens and fish convert grain into meat 3 times as efficiently as cattle; pigs are in between) - and a great deal of trade.
Trade, says Johann Norbeg, is like a machine that turns potatoes into computers, or anything into anything: who would not want to have such a machine at their disposal?
Coal makes the electricity that lights your house, spins your washing machine and smelts the aluminum from which your aeroplane was made; oil fuels the ships, trucks and planes that filled your supermarket and makes the plastic from which your children's toys are made; gas heats your home, bakes your bread and makes the fertiliser that grows your food. These are your slaves.
Think of this: never before this generation has the average person been able to afford to have somebody else prepare his meals.
The most fundamental feature of the modern world since 1800 - more profound than flight, radio, nuclear weapons or websites, more momentous than science, health, or material well-being - has been the continuing discovery of 'increasing returns' so rapid that they outpaced even the population explosion.
The cumulative accretion of knowledge by specialists that allow us each to consume more and more different things by each producing fewer and fewer is, I submit, the central story of humanity.
This is history's greatest theme: the metastasis of exchange, specialisation and the invention it has called forth, the 'creation' of time.
